A CAUSALITY ANALYSIS ON FACTORS AFFECTING HOUSING PRICES: CASE OF TURKEY

Abstract

Purpose- Crises can manifest themselves in many areas such as in political, social and economic areas, in the ordinary course of life. Especially in the practices related to the economic field, the crisis reaches a global scale and can affect many countries. Within the scope of the limitless dimensions of globalization, problems experienced in one country affect other countries as well. The aim of this study is to show the relationships between housing prices (Housing prices in Turkey after the 2008-2009 global financial crisis was subjected) and exchange rate, consumer price index (CPI), deposit interest rate, index of industrial production, employment. Methodology- In this study, quantitative research method is used and the study has the feature of correlational research. The VAR model was used in the study and the stability of the data was tested with ADF (Augmented Dickey Fuller) and Phillips Perron (PP) unit root tests. Findings- In the study, the long and short term relationships between housing price and the exchange rate, consumer price index, deposit interest rate, industrial production index and employment rate after the 2008-2009 global financial crisis impact for the period of 2010 January- 2019 December were examined with Johansen Cointegration and Granger Causality analyzes. The results show that there are long term relationships among the variables and there is a one-way short term relationship from deposit interest rate, USD / TL rate, industrial production index, CPI and employment to housing price index. According to the Johansen Cointegration test result, there is a long-term relationship between variables excluding CPI. Conclusion- As a conclusion of the analyses, it is seen that macroeconomic variables have an effect on the increase of house prices in Turkey during the financial crisis and post-financial crisis period. Changes in house price and deposit interest rates, dollar/TL exchange rate, industrial production index, CPI and employment rates play a decisive role in the decrease or increase in house prices. This will have a major impact on the increase in housing demand and, as a result, the development of the construction sector. In this study, similar results were obtained from national and international studies.

Keywords

• Housing prices
• housing price index
• Granger causality analysis
• Johansen cointegration analysis

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